Video | Agriculture | Confidence | Economy | Energy | Employment | Finance | Media | Property | RBNZ | Science | SOEs | Tax | Technology | Telecoms | Tourism | Transport | Search


NZ retail sales growth consolidated in September

NZ retail sales growth consolidated in September

• Retail sales ticked up 0.2%m/m in September
• Ex-auto sales were weaker
• Volumes flat over the quarter, but no change to 3Q GDP forecast

Retail sales values in New Zealand increased a modest 0.2%m/m in September (J.P. Morgan -0.4%, Consensus 0.4%), which marked a consolidation in sales growth after the 1.1%m/m bounce in August. While underlying sales appeared slightly weaker than the headline figure, with ex-auto sales flat, this figure was likely depressed by discounting from retailers and softer food prices. Over the quarter however, prices generally rose, which helped push retail sales values up by 0.5%, the second consecutive quarter of growth after a year of declines.

Over the month of September, sales mostly were flat - the majority of industries’ sales (13 of 20) changed by less than NZ$3m. On the upside, supermarket and grocery store sales were up 1.1%, and appliances continued a strong quarter of growth, up 3.6%, likely due to increased affordability from the stronger currency. Department store sales, though, were weak, down 3.2%, as was fresh produce retailing (down 6.9%), the latter probably affected by the 0.7% fall in food prices over September.

Over the third quarter, retail volumes essentially were flat (up 0.1%), slightly better than our forecast (J.P. Morgan -0.2%q/q). The difference is insufficient to alter the outlook for private consumption, so our forecast for 3Q GDP remains unchanged at 0.5%q/q. We expect consumption growth to strengthen in the quarters ahead due to positive migration flows, the recent pickup in housing market activity, and a rally in consumer confidence (chart).

Since the economy exited recession in 2Q, the data emerging from New Zealand has strengthened significantly, increasing the chances of earlier policy tightening from the RBNZ. While officials appear concerned by the potentially speedy transition back towards old habits of debt-fuelled consumption, and also by financial markets’ views on the economy as expressed through the higher currency, we don’t think the central bank’s collective hand will be forced just yet. Officials do not want to risk nipping the recovery in the bud, and will continue to hose down bullish expectations on the economy and caution against irresponsible consumption through their commentary, rather than through monetary tightening. Our call is for the first rate hike to come in July 2010 (50bp).

Full release with charts: Retail_121109.pdf

© Scoop Media

Business Headlines | Sci-Tech Headlines


Bell Gully: Uncertainty Ahead With New Unconscionable Conduct Legislation

new prohibition against ‘unconscionable conduct’ in trade is one of a number of changes to the Fair Trading Act 1986 that come into force from 16 August 2022. The new prohibition may have wide-ranging implications for many businesses... More>>

Statistics: Food Prices Increase 7.4 Percent Annually
Food prices were 7.4 percent higher in July 2022 compared with July 2021, Stats NZ said today... More>>

REINZ: Market Activity And Prices Continue To Ease, First Home Buyers Start To Return To The Market

New Zealand’s winter property market continues its recent trend, slowing from the pace of sales and price rises of last year — properties stay on the market longer and median prices dip... More>>

Kiwi Group Holdings: Fisher Funds Acquires Kiwi Wealth Business

Kiwi Group Holdings Limited (KGHL) today announced the sale of Kiwi Wealth to Fisher Funds for NZ$310 million... More>>

Retail NZ: Welcomes Return Of Cruise Ships

“Cruise visitors were big spenders in retail prior to COVID-19, and retailers in Auckland will be celebrating the arrival of P&O’s Pacific Explorer this morning... More>>

ASB: Full Year Results: Building Resilience Today And For Our Future

In its 175th year, ASB has reported a cash net profit after tax of $1,418 million for the 12 months to 30 June 2022, an increase of $122 million or 9% on the prior year... More>>